FIA details £40m cost capping option - Mercedes-Benz Forum

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FIA details £40m cost capping option

FIA details £40m cost capping option
Greater technical freedom for capped teams
30/04/09 13:02

A new era of budget caps an option for 2010
As first reported yesterday, the FIA World Motor Sport Council has agreed to introduce voluntary budget caps for the 2010 season and beyond.

FIA President Max Mosley had suggested a limit of £30m, €33m, but this was deemed too great a cut on current expenditure for many teams.

Today the WMSC announced that teams will have the 'option' to compete within a cost cap of £40 million (€45m) for the 2010 season and that the maximum number of entries for the championship has been increased to 26.

The cap would cover all team expenditure except:

# Marketing and hospitality;

# Remuneration for test or race drivers, including any young driver programmes;

# Fines or penalties imposed by the FIA;

# Engine costs (for 2010 only);

# Any expenditure which the team can demonstrate has no influence on its performance in the Championship;

# Dividends (including any tax thereon) paid from profits relating to participation in the Championship.

With the likes of Lola, iSport, USF1 and Prodrive expressing an interest in joining the Formula One championship next year, Mosley's vision is that the revenues generated from the sport itself would be enough to sustain a new entry, regardless of additional sponsorship.

"At £40m we believe that 70 per cent of the grid can generate a profit," the FIA stated. "This transforms the business case for owning a Formula One team, for both manufacturers and private investors.

"The FIA believes that cost capping will prove attractive, and it hopes that over time all teams will join.
So far, interest has been extraordinarily high from both existing teams and potential new entrants."

To help encourage the new entrants, Formula One Management has agreed to offer participation fees and expenses to the new teams. This includes an annual payment of US$10 million (£6.7m) to each team plus free transportation of two chassis and freight.

To be eligible for this, each new team must qualify as a 'Constructor' and demonstrate that it has the necessary facilities, financial resources and technical competence to compete effectively in Formula One.

To enable these cars to compete with those from teams which are not subject to cost constraints, the cost-capped cars will be allowed greater technical freedom. Wings will be permitted to be adjustable while engines not restrained by a rev limit. The teams will also be allowed unlimited out-of-season track testing with no restrictions on the scale and speed of wind tunnel testing.

The WMSC also announced that a new 'costs commission' is being implemented to monitor and enforce the cost cap.

The question now is which teams, exiting or proposed, will sign up the £40m limit by the deadline of 29th May.

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